Sales and marketing get the biggest shares of the Big Data pie
In addition to asking the IT and analytics functional managers to estimate how much their companies spent on Big Data in 2012, we asked them how the big data pie was divided. Which functions were getting the greatest and least shares of the big data pie?
The three business functions that are most directly related to generating revenue in any company account for 43% of total Big Data spending: sales (15.2%), marketing (15%), and R&D/product development/product engineering (11.3%). Customer service, another function that involves daily customer interaction, accounts for 13.3% of the Big Data budget.
“No matter which industry you talk about, I see analytics having the greatest impact on marketing first and customer service, second,” says Venkatesh Ravirala, executive director of business analytics at MGM Resorts International, a $9 billion gaming and hotel company. “You are going to see companies address those two areas with Big Data because of real-time service and real-time offers. The decision-making capability and the response time to do this have shortened significantly.”
Marketing and sales is where one multibillion auto insurance company has begun its Big Data initiative. The head of marketing analytics told us, “It was a good subset of data, and it wasn’t too big to tackle.”
The Eight Business Functions That We Explored for Big Data Practices
In addition to surveying IT and analytics executives, we also wanted to collect the experiences of senior managers in eight core business functions:
These managers accounted for 62% of the total survey population.
In contrast, four functions competed for less than 30% of the budget: manufacturing (or, in a services company, operations, which commanded 8.3% of the budget), finance/accounting (7.7%), distribution/logistics (6.7%) and human resources/personnel (5%). Of course, these functions are further removed from the revenue generation process. However, if this is the way companies decide how to allocate their Big Data dollars, our research shows it may be misguided, as we explain in the next part of this section.
Exhibit IV-1: How Companies Cut the Big Data Pie by Functional Area
Q16: Where Companies Across Industries Focused Their 2012 Big Data Investments (as a Percentage of Total Big Data Investments)
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Big Data Study Findings: Business Function